Economic Growth: A Short History of a Controversial Idea







From Rain Dance to Nasdaq







Petty’s Arithmetic









The Globalisation of an Ideology






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  1. Abi

    In writing a dissertation in 2014 I read Alchian’s theory of the firm where he said cooperation is what fosters a peaceful condition for growth to occur, where as competition does the opposite. I’ve lived by that idea since, at least for us here in Lagos we have a chance to build a more cooperative and less competitive society

  2. Sound of the Suburbs

    If we were actually pursuing growth things would be a lot better.

    The current goal is making money (capital accumulation).

    What is this GDP thing anyway?




    The economics of globalisation precedes the GDP measure when they thought inflating asset prices created real wealth.


    We need an economics that focuses on GDP to grow GDP.

    Neoclassical economics makes you think you are creating real wealth by inflating asset prices and we have been faffing about doing that.

    The new scientific economics of globalisation = 1920’s neoclassical economics with some complex maths on top.

  3. Jos Oskam

    “…Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what…”

    This is not by me, but by the creator of the GDP formula, Simon Kuznets. GDP is a very poor indicator for many reasons, even apart from those mentioned above. Borrowing money and squandering it adds to GDP while the resulting debt is ignored. Extracting and burning fossil fuels adds to GDP while the future depletion is ignored. Stripmining and deforesting nature adds to GDP while… you get my drift. To paraphrase Bastiat, the growth in GDP that is seen tends to mask decline in areas like nature and wellbeing that are not seen.

    It is tragic to see politicians and pundits thoughtlessly raving about a few tenths of a percent change in GDP while never seeming to realize how poorly this represents things that are really important to humanity.

    When will people stop worshipping at the GDP altar?

    1. Steve Ruis

      I might add that someone said back in the 60’s that “growth for growth’s sake is the philosophy of a cancer cell.”

      1. Ian Perkins

        BrainyQuote attributes it (“Growth for the sake of growth is the ideology of the cancer cell.”) to Edward Abbey, who also came out with “Society is like a stew. If you don’t stir it up every once in a while then a layer of scum floats to the top.”
        Thank you.

      2. John Wright

        A variation on the theme, from



  4. The Rev Kev

    Where the author says ‘For much of the human story, societies were nomadic or semi-nomadic, and organized in immediate-return systems.’ that is not entirely true that. Here I am thinking of the early Bantu in their expansion in Africa. Their wealth for them were in their cattle herds which being mobile, made possible the expansion of the Bantu down eastern Africa and into Southern Africa. These were long-term investments and Bantu society evolved to take care of these herds as they expanded. Your wealth in that society was in how many cattle you had.
    I suppose when you think about it, the paradigm of growth works – to an extent – when there are more lands to discover, more continents to be opened up, more frontiers to be discovered. But all of that ran out a century ago and so with no more new resources to be found to be exploited, we have now reached the point where where we have come up hard against the natural limits of this planet. And yet, our economies still use the same mode of operating when we lived in an ever-expanding world. We are far beyond the point where we should have evolved into a closed-loop economy.

      1. The Rev Kev

        More than that. For example. A young man could only really use cattle to be the dowry that he would need to attract a bride so cattle was a sign of his wealth. The status came with it. Cattle shaped their society immensely. Their villages were huge rings where the cattle would be locked in of a night and were called kraals. The people were so familiar with their cattle that a herdsman at a glance of a herd of several hundred cattle would be able to tell straight away if one were missing. It was a fascinating society.

      2. Off The Street

        On Wall Street, people used to ask Where are the client’s yachts?

        As a sign of the times, now they can ask Where are the client’s cattle, or hats?

    1. Dan

      The statement “For much of the human story, societies were nomadic or semi-nomadic, and organized in immediate-return systems” is absolutely true. Please see the book “Limited Wants, Unlimited Means” for a good primer. It includes an excerpt from Marshall Sahlins’ “The Original Affluent Society” – a great introduction to hunter-gatherer societies. There is also a wonderful comparison of immediate return and delayed return societies as exemplified in the Hadza people, and the problems that arise once an immediate return society begins to settle, even minimally.

      The Bantu evolved later and are agro-pastoralists, not foragers. The Hadza have persisted as foragers even after contact with the Bantu and other groups. They have also repeatedly resisted government and missionary efforts to introduce farming and Christianity. The Hadza are perhaps the best example of how human beings lived on earth for over 99% of our existence, that being in a largely cooperative, egalitarian manner, devoid of concepts such as wealth.

    2. Abi

      Bantu people were not cattle herders, west central and much of Southern Africa is basically forest, there’s no way in this world anyone could move herds this way; it’s our northern brothers and sisters that are cattle herders. That being said, culturally we (Bantu) generally moved to set up new families/villages that’s how we spread not through some farming technique, that’s false

  5. Ignacio

    When I comment with someone, my wife for instance, about the need to get rid of GDP growth as the main political objective and think of small well being objectives I tipically receive commiseration in their eyes: “Yes Nacho, you are right, go and rest for a while”

    1. animalogic

      “I tipically receive commiseration in their eyes”
      Its the burden of being right in the world of wrong.

  6. Steven B kurtz

    As usual, scale is ignored. In my (still living) 94 year old mother’s lifetime, human population quadrupled. In large mammals, this is sometimes called “plague phase.” Add a (minimally) tenfold increase in technological leverage in converting finite resources into infrastructure, food, transportation, consumable goods and services, and the increasingly rapid decline of the ecosphere is hardly a surprise. Dematerialization of the economy is a myth! And don’t expect money printing or cyber tokens as solutions. They are simply power tools to access real stuff.

  7. Wukchumni

    One of the drivers of growth in the UK in the late 18th century that was missing, was money. It reached a crisis stage in 1797.

    A chronic shortage of coins, silver specie in particular.

    Then, the freebooters came to the rescue!

    Silver 8 Reales coins plundered from the Spanish were reworked into being coins of the British realm & many other outposts in the colonies.

    The first effort was pretty weak, all that was done was they were counterstamped with a small portrait of King George III upon the countenance of King Charles IIII, which led to this ditty:

    “In order to enable the Spanish Dollar to pass, the head of a fool was struck on the neck of an ass.”

  8. Wukchumni

    A couple of drivers of growth showed up both around the same time, the Haber Bosch process that allowed for pretty much unlimited food resources, and worldwide fiat money, which also had no limits to production.

    We’ve quadrupled the world’s population since these 2 events.

    1. Ian Perkins

      The Haber-Bosch process allowed for a vast, but in no way unlimited, expansion of production.
      Fiat money can be produced in unlimited amounts, but, according to both common sense and MMT, actual production also has actual limits.

      1. Wukchumni

        Setting the world free from first gold and then silver restraints (the last silver coins issued for circulation in the 1st world was in 1969) allowed for a as much as you’d like fiat economy, beyond limits and also risk. (for now, that is)

        For what it’s worth, there has never been an instance of hyperinflation in the cyber money age.

        1. Wukchumni

          Whoops, my bad. Germany issued silver 5 Mark coins for use in circulation until 1974, forgot about that.

        2. Ian Perkins

          As much wood, steel and cement, or as many doctors, teachers and entertainers as you’d like, without limits, just because money can be printed without limits?

          1. Wukchumni

            Money is only the lubricant, the ball bearings if you will. It has no agency over where it goes, other than in a tight circle.

          2. Oregoncharles

            It’s a fundamental issue: money is an abstraction that can increase without limits; the real world, the real economy, is not. MMT does address that, but I think it’s a root source of the persistent inflation that plagued the economy until rather recently. Apparently the Fed, or somebody, can stop it if they wish. However, I think that that history is one reason for the resistance to MMT – it sounds like a formula for more inflation. Since it hasn’t actually been tried as a policy (the Pentagon’s limitless funds are really just corruption), we won’t know for sure until it’s tried. There always seems to be a lot that the economists don’t know or won’t admit.

  9. Thuto

    Politicians don’t have the analytical tools to pick apart the “constant growth” argument so they default to trumpeting it as a cure for all social ills (no doubt with encouragement from mainstream economists). On the other end of the spectrum, the growth story seduces ordinary people because they’re told their share of the spoils, courtesy of the trickling down effect, will lead them to a “better life”. As such, nothing short of a massive ideological decolonization effort is needed to strip growth of the superhero status it enjoys in contemporary economic discourse.

    1. Norb

      The only positive hope is that enough people take it upon themselves to rise to the occasion. People who have freed themselves from the tyranny of the current economic system need to be examples for others to follow. Those that can, must change their lifestyles. They indirectly become leaders by example.

      There is a spiritual component in this transformation that has not really surfaced yet, but feels like it is stirring under the surface. There is so much denial going on that something will burst forth. What form that takes is anyones guess, but most people are just looking for leadership when pressed.

      Instead of the neoliberal message of selfish pursuits lead to a better life, the message of self-sacrifice and service to something greater resonates with most people. Instead of being just lip-service or propaganda, this sentiment must be channeled into concrete policies and actions- beginning with oneself.

      Underlying all this is the need for peace. The Big Lie of growth pales in comparison to the Big Lie of perpetual war. Both lies reinforce each other.

      How to explain the conflict between capitalists and well, all the rest, other than a spiritual war. Where does one place ones faith? Violent and selfish Nationalism will not suffice.

      Strength in humility instead of conquest is the dividing line. The decolonization of the human mind must be followed by an awareness and consciousness that the world is here to live in, not conquer. That is an enormous shift in human action and consciousness- those that live this ideal must be valued and emulated.

      The attempt must be made- is being made.

  10. Carolinian


    Elsewhere today Lambert talks about religion as Marx’s “opiate of the people” but there are many versions of that drug and our secular overlords seem to have replaced the Bible with other unquestioned assumptions, many of them economic. Perhaps at some point rationality has its limits and illusions of some kind of are necessary to make the engine go. The problem unfortunately is that the current engineers seem to believe those illusions themselves and follow them blindly. They are addicts too. Is it time to “just say no”?

  11. lyman alpha blob

    Good essay. The author gets the the heart of it with this –


    – where the theory of growth is an attempt to rationalize the greed of the few who really like playing capitalist at the expense of everyone else. How about they get their jollies playing Monopoly and leave the rest of us alone?

    I’ll just leave this here, a beautiful tune by one of my favorite bands, Old Crow Medicine Show. Four minutes that will make you feel better after reading of all the nastiness in the world, and very apropos to this article –

    Ain’t It Enough?

    1. hemeantwell

      I agree with the thrust of your comment but


      As noxious as their displays of wealth are, and as much as it’s possible to make a case that pathological narcissism infuses the system, the motive to accumulate to compete with rivals, current and future, is central. It’s politically useful to attack the way that this motive draws others into its van, i.e. to make them personally despicable. But it might be worthwhile to consider how much the accumulation motive is embodied as a kind of social contract in the firm’s organization. I imagine that individual capitalists say to themselves “I’ve made my pile, time to sail away in my yacht,” but the firm and those who will stay on want to keep things going.

  12. rod

    this really stuck out to me.
    and I can’t really identify why, however I couldn’t stop thinking about the growing proliferation of plastic while reading the article…

  13. David J.

    Back in the early 80s, the professor for whom I was a grad assistant frequently urged me to read Canetti’s “Crowds and Power.” It’s a powerful and useful book. Well-written and accessible and full of thought-provoking ideas. I’d recommend it for anyone who wants to ponder social relations.

    In this case, Dale seems to use Canetti’s book as a kind of straw-man entry to his real topic:an intro to his discussion of growth/degrowth. I guess you gotta start somewhere? Maybe he should have simply directly referenced Canetti on his notion of “feast crowds” (pg 62 of my edition of Crowds and Power.)

    The above comments by Sound of the Suburbs and Joe Oskam are incisive, imo. The essence of the matter boils down to developing a more rigorous distinction (and understanding) of the difference between productive economic activity and non-productive economic activity. Hudson is really good on this.

    1. Wukchumni

      Go back further and Gustave Le Bon’s The Crowd from 1896 ages well, because human motives don’t change much…




      1. JEHR

        As I read these quoted words it is hard not to think of the crowds that surround Trump on his so-called “rallies” for his base. One cannot but help ask, Why is anyone listening to this man? Ans: “He is no longer himself, but has become an automaton who has ceased to be guided by his will.”

      2. Norb

        What makes the masses the masses is that they are followers. This is a double edged sword the elite exploit relentlessly- that is what makes them the elite. They hold the power, and desire, to manipulate the masses through narrative and image. These stories and images make the world and human experience comprehensible. When corruption sinks in, that whole group is doomed to eventual failure if a self-correcting mechanism is not present. Leaders/elite and masses both fail.

        It is very self-serving for the elite to blame the masses when the “illusions” stop working their magic. Have the elite ever “thirsted after truth” either? Truth meaning a universal truth applicable to all, or the Truth embodied in a personal view as apposed to a public view? Such Truths tend to obfuscate the drive for personal power, which doesn’t sit well within groups of people let alone groups of differing cultural or ethnic experiences.

        Manipulation of the masses is not the problem, it is manipulation to what end that is the issue. In that respect, the elite leadership should take more responsibility and bear a greater portion of blame for failure- for in fact, they are driving the whole process.

        In a nutshell, this is the failure of the current human situation. A greedy elite incapable or unwilling to use the powers at hand to bring about a fair and equatable world. It is just too easy for them to continue their deceitful manipulations and blame hapless or trusting victims.

        Another way is for the elite leadership to listen to the people/masses and take their needs and desires into account when molding public opinion. Such an elite will foster the population’s wellbeing, not fear them or treat them as a mob. That process makes the elite leadership legitimate.

        The most stupid leadership is one that fails to change course when the images and narratives moving its society are failing. The whole society becomes weak and ineffective on multiple levels.

        At some point, the factional fighting must stop. It seems inevitable that human society will rebalance itself to manageable levels. The question becomes how violent that transition will be.

      3. hemeantwell

        LeBon writes of crowds as though there is a complete discontinuity between a person’s thought and behavior when they are in a crowd and when they are not. That’s nonsense, a cocktail party generalization. I’ve been in plenty of political crowds and the remarkable transformation he purports was not evident. Le Bon was a rank conservative and his analysis reflected his detestation of the French left, fueled by his experience of the Commune. He’s writing in a way that helps justify the massacres that concluded it.

  14. Ian Perkins

    I often wondered about this fetishisation of growth in GDP (I’m in my sixties now), when in developed countries it seemed to have as many negatives as positives.
    Then I realised that capital, in its most general sense, doesn’t invest in the hope of getting its money back, but in the hope of its money back plus some more. The only way that can carry on for very long is through growth.
    I’m not an economist, but that explanation really rang true for me.

    1. notabanktoadie

      Usury based finance REQUIRES growth to pay the interest.

      Why then government privileges for private credit creation?

      1. nothing but the truth


        by infinite growth they actually mean infinite growth of debt, which is required for the current financial system to survive.

  15. Susan the other`

    Just Thank You. Thank You tons. I will remember the name Gareth Dale and The Ecologist. And the reference to the (unexplained) runaway condition of human economics as “Capitalist Time” v. (of course) real time. Because as we have learned here at NC “financial time goes much faster than real time.” And etc. This essay was wonderful, and now we have an outline of why that is true.

  16. John Wright

    From the text:


    The implications of this statement are large, for it multiplies out to a US GDP of 330E6 x 15E3 = 4.95 Trillion or about ONE FOURTH of the current USA economic output (19.39 trillion in 2017).

    Forget the Green New Deal, shrink economic output by 3/4 in the USA while drastically lowering inequality to share the shrunken economic pie and one should observe a large positive effect on future climate change while having a reasonable USA citizen well-being,.

  17. S N Tekur

    There is considerable debate on GDP growth rates in developing countries (India). There is anxiety to catch up with the developed countries leading to accelerated development plans -this is beneficial for reducing unemployment and improving the living conditions of a vast majority of people. However, the impact on the environment could be severe as any development work involves chopping trees, and causing damage to the natural habitat of endangered species. Striking a balance is difficult.
    This is really a very complex issue and a conscious attempt to restrict the GDP needs to be lauded- if it ever happens!

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